Posts Tagged ‘economy’

EFP Brief No. 192: Delphi-based Disruptive and Surprising Transformation Scenarios on the Future of Aviation

Thursday, August 18th, 2011

Our study intends to present disruptive and challenging events, i.e. wildcard scenarios, with a significant impact on the aviation industry. We aim to assist decision and policy makers in preparing for the future and enrich decision making processes on possible courses of action by presenting a robust and reliable decision support system and creating awareness for opportunities in strategy and policy. We demonstrate how a Delphi survey (in our case a real-time variant) can be applied as a starting point to systematically develop wildcard scenarios by conducting a deductive wildcard analysis.

Combining Delphi with a Wild Card Approach

In an increasingly uncertain environment, planning uncertainties force policy and decision makers to foster strategic forecasting and technology planning processes, including future-oriented technology analyses (FTA). In spite of its growing importance, the recent expansion of FTA has paid little attention to conceptual development, research on improved methods, methodological choice or how best to merge empirical/analytical methods with stakeholder engagement processes. This is especially the case for Delphi surveys, which are one of the most commonly used tools in FTA. We address this issue by demonstrating how an innovative web-based real-time Delphi can ensure validity and reliability of foresight activities via taking relevant drivers of change into account, such as technology, socio-culture, politics, the economy and the environment. Our highly standardised scenario development process applies qualitative as well as quantitative measures and equips policy and decision makers with a robust and reliable decision support system.

We outline specifically how the Delphi method can be used to identify wildcard developments deductively and at an early point in time (Däneke, von der Gracht et al. 2010) while we also illustrate inductive wildcard analysis.

Furthermore, the results of our study and adjacent analyses allow to derive an ‘opportunity radar’, which depicts a range of opportunities and challenges for governments and companies (von der Gracht, Gnatzy et al. 2010). Our ‘radar’ is the product of several participatory future workshops in which the examined scenarios were discussed. It is designed to provide a pragmatic but also creative perspective on the future while displaying opportunities with different degrees of innovativeness.

Innovative Real-time Delphi

The study employs an innovative version of the Delphi method (von der Gracht, Gnatzy et al. 2011) and is designed as an Internet-based, almost real-time survey, which increases the validity of results by streamlining the classical procedure. Our Delphi method combines quantitative as well as qualitative research approaches to ensure a high level of scientific rigour and thus refutes objections raised in the past on grounds of expert panel biases or time scale disadvantages (EC 2004).

Furthermore, we have introduced methodological and usability improvements so that Delphi remains a valuable tool for FTA procedures. Such improvements are the ‘ease-of-use facilitator portal’, the ‘consensus portal’ and a ‘graphical real-time feedback’, which reduce drop-out rates and speed up the whole process.

Delphi Data Sample and Analysis

Within the scope of our Delphi survey (Linz and Rothkopf 2010), 57 aviation strategists, C-level executives, aviation researchers and consultants evaluated 40 projections in terms of probability (scale from 0-100%) and desirability of occurrence (5-point Likert scale) as well as impact on the aviation industry (5-point Likert scale).

In addition to their quantitative assessments, participating panellists were able to provide qualitative statements to support their numerical estimations and discuss relationships between factors thought to shape future developments. Based on the assessments and more than 1,300 collected verbal arguments offered in support of the individual expert expectations, relevant extreme and wildcard scenarios were deducted, enabling contingency planning and preparation for unforeseeable and disruptive events (Cuhls and Johnston 2006). Furthermore, the arguments and comments provided the foundation for later storytelling and the identification of weak signals, wildcards, outlier opinions and mainstream arguments.

Delphi-based Deductive Wildcard Analysis

The deductive wildcard analysis aimed at developing and analysing company and market-specific wildcards. Since the kind of data required for such an analysis is generally not readily available, the wildcards have to be developed from scratch. Due to the complexity of the future and the unpredictability associated with complexity, the number of potential surprises is virtually endless. Therefore, it is impossible to identify all possible wildcards in an exhaustive manner. Nevertheless, the deductive wildcard analysis provides an adequate approach for identifying those issues relevant to a specific company at a reasonable cost.

In the first step, the critical future assumptions have to be identified. In a second step, wildcard scenarios are deducted on the basis of a qualitative Delphi data analysis and scenario techniques. This is followed by the development of plausible scenario origins and paths. Fourth, relevant wildcards have to be elaborated. And finally, possible strategies and policies need to be developed in order to enable linkage between strategy and daily business requirements. The wildcard transfer has to be conducted through a process of storytelling, contingency planning and the set up of an early warning system.

Inductive Wildcard Analysis

The inductive wildcard analysis is based on the idea of manifold archetypical wildcards that generally have to be taken into account by policy makers and business leaders. Those wildcards can represent internal (e.g., financial failure) or external disruptive events (e.g., natural disaster). The wildcard analysis consists of five incremental steps.

First, potential wildcards have to be collected. Second, the wildcards identified need to be assessed in terms of relevance to politics and business. In a third step, relevant wildcards must be selected. The wildcards thus selected are then elaborated with regard to their operative and strategic implications. Finally, possible strategies and policies are developed and implemented.

The Future of Aviation between Terrorist Threats and New Fuel Technologies

Based on the survey data, we derived several wildcard scenarios for the year 2025, which address manifold aspects ranging from natural catastrophes to technological revolutions (Linz and Rothkopf 2010).

(1) Aviation Terrorism Reloaded

Since 9/11, the fear of terrorist attacks has increased tremendously. Important hubs and large airports especially could become the focus of physical aggression.

(2) Spread of a Global Pandemic

New pathogens originate worldwide on a regular basis. The potential impact of a prolonged global pandemic on aviation networks has become apparent in the case of SARS in Asia in 2002/2003.

(3) Natural Catastrophes

Major impacts can evolve from volcanic activities as in 2010, but danger might also arise from space. Planet Earth has always been subject to impacts from comets and asteroids, which pose a potential source of danger to life and property.

(4) Deglobalisation, Relocation and Protectionism

Intense worldwide economic shocks could provoke a fundamental re-thinking of free trade resulting in strict protectionism.

(5) Energy Revolution

An energy revolution based on a scientific breakthrough would render all the traditional energy sources obsolete. Nuclear fusion and zero-point generators, which do not require fuel to produce heat and energy, could be technologies of this kind.

(6) Revolution in Transportation Technologies and Concepts

New transportation technologies and concepts are being discussed that could revolutionise air transportation or pose significant opportunities and threats to the aviation industry.

(7) The Fabbing Society

‘Fabbing’ means the direct fabrication of objects from computer models. So far, the technology has only been applied in the industrial sphere. However, with technical advancements and falling equipment prices, these technologies could also be made available for private use by 2025.

Based on current and expected risks, we set up a process to develop a set of future chances and opportunities, which is represented by our ‘opportunity radar’ (Linz and Rothkopf 2010).

The ‘opportunity radar’ focuses on promising opportunities related to aviation over the next 15 years. Some of them are already near implementation while others remain visions by current standards.

Applying the Results in the ‘Competitiveness Monitor’

The results of our research have already been used on several occasions. Multiple workshops with stakeholders from the aviation industry were held. There, the implications of the measures for the different stakeholder groups were further discussed. In addition, the methodological results from the wildcard and opportunity analysis have contributed to the joint research project ‘Competitiveness Monitor’ (CoMo) conducted as part of the EffizienzCluster LogistikRuhr of the German Federal Ministry of Education and Research. The CoMo will combine three foresight tools in a single IT-based futures platform. This platform will integrate user specific information from (1) a trend database (TDB), (2) a collaborative prediction market application and (3) an individual future workshop.[1]

With our research, we aim to assist decision and policy makers in preparing for the future. Therefore, we present disruptive and challenging events, i.e. wildcard scenarios. Furthermore, we provide a robust and reliable decision support system to assist decision and policy makers in making informed and sound decisions in the light of complexity.

[1] We presented detailed findings from the Competitiveness Monitor project in our 4th FTA 2011 conference papers (1) “Competitiveness Monitor: An integrated foresight platform for the German leading-edge cluster in logistics” and (2) “Trend Database design for effectively managing foresight knowledge – A sophisticated FTA content base architecture to enable foresight processes”.

Authors: Steffen Schuckmann            

Dr. Marco Linz                      

Dr. Heiko von der Gracht       

Dr. Inga-Lena Darkow            

Sponsors: German Federal Ministry of Education and Research1
Type: Single issue brief
Organizer: Center for Futures Studies, EBS Business School,
Duration: 06/10 – 05/13 Budget: 2.3m € Time Horizon: 2025 Date of Brief: June 2011  


Download EFP Brief No. 192_Future of Aviation

Sources & References

Cuhls, K. and R. Johnston (2006). ‘Corporate FTA’, Anchor Paper, Proceedings of the Second FTA Seville Seminar, Future-Oriented Technology Analysis: Impacts on Policy and Decision Making. Seville, IPTS.

Däneke, E., H. A. von der Gracht et al. (2010). ‘Systematische Wildcard-Analyse mit Hilfe der Delphi-Methode am Beispiel Future of Aviation 2025.’ In: Gausemeier, Jürgen (ed.) 2010: Vorausschau und Technologieplanung Paderborn, Heinz Nixdorf Institut. 6: 419-440.

EC (2004). New Horizons and Challenges for Future–oriented Technology Analysis – Proceedings of the EU-US Scientific Seminar: New Technology Foresight, Forecasting & Assessment Methods. F. Scapolo and E. Cahill, European Commission, Joint Research Centre (DG JRC), Institute for Prospective Technological Studies.

Linz, M. and A. Rothkopf (2010). The Future of Aviation. Global Scenarios for Passenger Aviation, Business Aviation and Air Cargo. St. Gallen, BrainNet.

von der Gracht, H., T. Gnatzy, et al. (2010). Transportation & Logistics 2030. Volume 2: Transport infrastructure – Engine or hand brake for global supply chains? PricewaterhouseCoopers (PwC)/ Supply Chain Management Institute (SMI).

von der Gracht, H. A. and I.-L. Darkow (2010). ‘Scenarios for the logistics services industry: A Delphi-based analysis for 2025.’ International Journal of Production Economics 127(1): 46-59.

von der Gracht, H. A., T. Gnatzy, et al. (2011). New Frontiers in Delphi Research – Experiences with Real-Time Delphi in Foresight. Conference Volume of the WorldFuture 2011, Vancouver, Canada. In Press.

EFP Brief No. 187: Using Foresight to Involve Industry in Innovation Policy

Thursday, August 4th, 2011

The brief describes the design and implementation of a success scenario workshop used in Malta to allow industry to give a foresight-based input to the design of innovation policy. The exercise drew upon the results of several industry-level studies in the small new EU member state aimed at identifying the drivers and inhibitors of private sector R&D and innovation investments.

Re-designing Regional Innovation Strategy

The exercise drew upon the results of several industry-level studies in Malta aimed at identifying the drivers and inhibitors of private sector R&D and innovation investments.

The segmentation of this micro-ecosystem into three types of firms – start-ups, SMEs and large firms – linked by a complex network and common framework conditions, provided the backdrop for a future-oriented exploratory exercise that considered the implications of the drivers of R&D and innovation in future markets, products, processes and services.

The brief describes the methodology and results of this workshop aimed at designing creative measures for innovative futures and hence encouraging firms to increase the level and effectiveness of their R&D expenditure. Lessons for the use of the success scenario approach for innovation are discussed.

Innovation is a key to the survival and growth of businesses in the present global competitive environment. Yet for many firms it remains a daunting challenge. Government today recognises that it must provide the conditions in which enterprises can flourish, and this includes provision of policies and support measures that help firms bring successful innovations to the market. Some policy measures in this area are longstanding, but the changing environment means that there is a need for constant review and adaptation to meet firms’ current and future needs.

The Futurreg Project

At the time this exercise was undertaken, Malta was reappraising its innovation policy support framework. The national agency responsible for enterprise support and innovation (Malta Enterprise) was developing a regional innovation strategy (MARIS).

Futures approaches were applied as part of this innovation strategy through Futurreg, an Interreg3c project aimed at promoting the use of foresight in ongoing regional development projects. The other main actor was the Malta Council for Science and Technology, which represented the Malta partner in Futurreg. The Council provided foresight support to MARIS and used the project to consult business and other stakeholders on necessary measures to support future innovation needs. This brief describes the findings of a success scenario workshop that had three aims:

  • to define a broad framework for a future-oriented national innovation policy,
  • to create an enhanced and shared understanding of the drivers of innovation,
  • to explore success scenarios and design new measures tailored to the specific needs of three types of Malta-based companies (see below).

The workshop brought together major stakeholders in innovation, including business leaders representing the three targeted groups of firms, public entities and other agencies supporting local business, and university experts. The basic idea was that by looking at drivers of innovation in the future and by identifying key deficiencies of firms in Malta in their ability to respond to these drivers, it would be possible to design policy measures that would address those deficiencies in the most effective way. In advance of the workshop and in consultation with stakeholders, a number of key drivers of innovation were identified, including economic, political, environmental, security, health, social change and ICT factors.

Success Scenario Workshop: Action-based Approach

The success scenario approach used was developed at the University of Manchester and has been applied in exercises setting UK national strategy for ICT, biotechnology and nanotechnology as well as in policy-related areas such as university-industry links (Cassingena Harper and Georghiou, 2005), international scientific cooperation policy (Georghiou et al., 2006), infrastructure policy (Keenan and Popper, 2007) and the development of the European Research Area. Ian Miles has described the success scenario approach in terms of two elements:

  • Desirability: capturing a vision of what could be achieved or aspired to by the sponsoring organisation or the wider community that it represents.
  • Credibility: the scenario is developed with the assistance and validated by a sample of experts in the area chosen to reflect a broad range of interests and usually including both practitioners and researchers (Miles, 2002).

It is an action-based approach, with the shared vision among senior stakeholders of what success in the area would look like being specified in terms of goals and indicators, which provide the starting point for the process of developing a roadmap to get there. The purpose of having such a vision of success is to set a ‘stretch target’ for all the stakeholders. The discussion and debate involved develops mutual understanding and a common platform of knowledge that helps to align the actors for action.

Discussion of Drivers of Innovation in Firms

The success scenario workshop on Creative Measures for Innovative Futures convened on 15 May 2007. In line with the national research and innovation strategy developed last year by MCST, where it was noted that MCST and Malta Enterprise have shared competencies in the area of research and innovation policy and need to work together in developing new measures, this workshop provided a setting for creating a synergy of efforts in innovation. The workshop offered an opportunity to bring together the insights of relevant stakeholders from business, academia, government and business support agencies in innovation policy design. There was a good representation of all sectors at the event.

The previous Futurreg-MARIS workshop held in March 2007 highlighted the fact that a number of important initiatives are underway focused on promoting innovation in business, namely the MARIS, METIC and Forlink projects. The local industry studies carried out through these projects identified a number of inhibiting factors to innovation and also a range of opportunities in terms of niche areas to be exploited. The aim of the follow-up workshop in May 2007 was to build on this substantial work and place it in a more futures-oriented context where alternative approaches can be openly identified and discussed.

Figure 1 (below) shows the simplified process of the workshop. Items in blue shading represent the inputs coming from previous stages, yellow shading represents group work and green the plenary sessions. The workshop was attended by 45 experts, drawn primarily from the private sector and government but involving also academia.

In the plenary warm-up session, the key drivers of innovation were presented and discussed in order to identify immediate gaps from a local business perspective. Participants were then divided into three working groups, representing the needs and interests of three main types of firms. Workshop participants felt that innovation policies could best be distinguished by an amended classification of three types of firms:

  • Type 1: start-ups
  • Type 2: SMEs
  • Type 3: large firms

The working groups discussed the key drivers and identified the ones that are most relevant to their future development strategies and visions. They focused on the following questions:

  1. Which drivers are currently influencing innovation in your sector?
  2. Which drivers are likely to influence innovation in your sector in the next five to ten years?
  3. What are the likely future trends in innovation in your sector? In your products? In your services and processes?
  4. Are any innovation drivers or trends missing?

The plenary session focused on defining the impact of drivers of innovation on each of these types of firms. Participants were then asked to map the drivers according to their level of importance.

The working groups then focused on identifying the main deficiencies to innovation based on the RICO framework, which separates needs into four broad categories:

  • Resources: Insufficient resources to undertake the work without public funds, which is generally true for academic research and accepted for business R&D that is either highly uncertain and/or where social returns justify an investment that does not meet private criteria.
  • Incentives: Scientific structures or the market provide insufficient incentives for socially desirable behaviour, for example, academic-industrial collaboration. Fragmented or risk averse markets may also obstruct innovation.
  • Capabilities: Organisations lack key capabilities needed for the innovation process, for instance, the ability to write business plans or raise venture capital.
  • Opportunities: Generation of opportunities for innovation provides one of the main justifications of public support of science. Need also to consider how firms can get hold of such opportunities through knowledge transfer/exchange.

Participants were then asked to map the drivers according to their level of importance. A similar map was produced from a discussion of deficiencies drawing upon an earlier exercise (see Figure 3 below).

In the afternoon, the workshop entered into its more creative phase by using the results of the morning session to design Creative Measures for Innovation Support. Working groups then identified appropriate innovation policies to address the particular needs emerging in their discussion. The final plenary session captured the inputs to define a desired and feasible national portfolio of innovation policy measures and instruments.

Innovation Success Scenario for Malta: Change of Culture and Culture of Change

The Success Scenario for Malta takes as its core theme “change of culture and culture of change” as culture emerged as the key driver of innovation, featuring strongly in relation to the discussion on drivers, deficiencies and measures.

Shared Public-Private Innovation Concerns

The key innovation policy challenge for Malta is defining and spearheading a national political and economic vision in a more coherent and integrated way and ensuring broad societal acceptance. Government and enterprise face a number of innovation challenges relating to growing environmental, energy and security concerns and share a set of systemic concerns regarding improved networking and knowledge transfer across sectors and organisations; this involves links between business and academia in particular. Business and government have an enhanced demand for more innovative solutions to societal needs, sparked by the growing sophistication of needs and the emergence of more intelligent consumers and citizens.

Our Success Scenario Pathway: Synergetic relationships need to be developed between the public and private sectors through closer collaboration between government and business on key innovation concerns. Public innovation support to business could target:

  • Engaging stakeholders in implementing a national political vision and renewal while allowing for a dynamic feedback loop and learning.
  • Helping firms to innovate and sustain economic growth and profitability and to provide innovative solutions to societal needs; supporting firms in coping in innovative ways with the challenges presented by the physical environment, including energy and infrastructure; providing firms with capacities for providing innovative solutions to specialised customer demand.
  • Facilitating access to new technologies and knowledge.

The main features of the emergent success scenario were:

  • A political vision on innovation, targeting branding of InnovativeMalta and the provision of innovative solutions for the societal needs spearheaded.
  • This will be implemented through a National Innovation Platform and a strategy for capitalising Xon the small country advantage and geostrategic position coupled with the diffusion of a culture favourable to innovation and risk-taking – a ‘can do’ culture.
  • An ecosystem of well-networked organisations engaged in mutual learning for self-sustaining growth through the nurturing of constant adaptation and learning processes. This will be supported through a state-of-the-art support infrastructure and an accessible national knowledge platform to provide the springboard for innovation.
  • Firms are well-networked to customers at home and abroad and attuned to market intelligence; they scan and make use of enhanced in-house innovation management capabilities.

A series of detailed policy measures targeted to each of the three firm types was also produced.

Innovation Policy: Responding to Drivers of the Future

The success scenario approach is a tool tailored to the needs and realities of senior decision-makers in the public and private sectors while it maximises the chances of engaging real stakeholders at a level of seniority sufficient to implement emerging visions.

The device of a 24-hour workshop only works with extensive preparation to develop framework and contextual information. Innovation policy provides a natural focus for foresight approaches because of the need to respond to the drivers of the future. The framework used needs to be properly grounded in a theory of innovation to ensure that it is not merely an exercise in producing a wish-list.

Iterations and follow-up exercises and activities can provide an ideal opportunity for continuing the discussion on the feedback received, extending the debate to a new cluster of stakeholders or those who were unable to attend the first event. Such activities allow updating the scenarios and recommendations and support reviewing implementation and obstacles to progress.

Authors: Jennifer Cassingena Harper

Luke Georghiou             

Sponsors: DG Regio, EU Commission, Interreg 3C and Government of Malta  
Type: N/A  
Organizer: Malta Council for Science and Technology  
Duration: January-July 2007 Budget: N/A Time Horizon: N/A Date of Brief: September 2007


Download EFP Brief No 187_Using Foresight to Involve Industry in Innovation Policy

Sources and References

Cassingena Harper, J. and Georghiou, L. (2005): ‘Foresight in innovation policy: shared visions for a science park and business–university links in a city–region’, Technology Analysis and Strategic Management 17.

Georghiou, L., Keenan, M., Popper, R., Harper, J., Crehan, P. and Clar, G. (2006): SCOPE 2015 – Scenarios of future science and technology developments in developing countries 2015, Report to European Commission 2006

Miles, I. (2002): Scenarios and Foresight – Towards a Constructive Integration, PREST, mimeo, July.

EFP Brief No. 165: Global Technology Revolution China

Tuesday, May 24th, 2011

The purpose of this study was to identify emerging technology opportunities that the Tianjin Binhai New Area (TBNA) and the Tian-jin Economic-Technological Development Area (TEDA) in Tianjin, China could incorporate into their strategic vision and plan for economic development through technological innovation, to analyze the drivers and barriers that they would face, and to provide action plans for implementation.

China’s Next Regional Engine for Economic Growth

The Tianjin Binhai New Area (TBNA) consists of 2,200 square kilometres along 150 kilometres of coastline in the municipality of Tianjin in northeast China. Tianjin municipal authorities first established this locality in 1994. At that time an arid, undeveloped area, TBNA was given the ambitious task of spurring industrial growth in Tianjin. In little more than a decade, it has become home to 1.4 million people, northern China’s largest container port, and a broad base of industry and manufacturing.

In 2006, China’s State Council named TBNA a “special pilot zone” with a mandate to become the country’s next regional engine for economic growth. Now reporting directly to the State Council, TBNA is expected to invigorate the economy of the northeastern Bohai Rim region in the same manner as Shanghai and Suzhou did in the Yangtze River delta area and Guangzhou and Shenzhen in the Pearl River delta area.

The Tianjin Economic-Technological Development Area (TEDA) is one of three administrative zones in TBNA. It is also TBNA’s industrial and manufacturing base and the centre of TBNA’s financial and commercial activities. TEDA is to play a key part in the economic growth envisioned for TBNA. Established in 1984, TEDA is today a bustling industrial-park complex. It possesses a robust manufacturing base, with pillar industries in electronics, automobiles and parts, food processing and biopharmaceuticals. Many of the world’s Fortune 500 companies, top Chinese firms, and other leading multinationals have strong presences in TEDA.

A Vision of the Future for TBNA and TEDA

The State Council envisions TBNA becoming a centre in north China for leading-edge research and development (R&D) and technology incubation, first-class modern manufacturing, and international shipping and logistics. At the same time, the State Council intends for TBNA to lead efforts to address many of China’s most urgent national problems, such as rising energy demands, a growing scarcity of usable water supplies and gravely escalating urban pollution. Thus, TBNA is to present an alternative to the traditional industrial economy, shaping a model of sustainable development and eco-friendly industry.

Innovation in science and technology (S&T) stands at the core of this vision of economic and environmental development, particularly of cutting-edge R&D. TBNA will need to take definitive steps to pursue this goal, and TEDA will be at the forefront of this effort. Building on its existing manufacturing base, TEDA aims to transition from a successful industrial-park complex into a state-of-the-art science and engineering (S&E) centre for high-impact emerging technologies. Other enterprises with relevant capacity located elsewhere in TBNA will follow suit. The desired end result is innovative R&D that meets international standards and positions TBNA as a global technology leader.

The Role of this RAND Study

Early in the process of developing a strategic plan for this ambitious transformation, senior managers from TBNA and TEDA found a 2006 report by the RAND Corporation, The Global Technology Revolution 2020: Bio/ Nano/ Materials/ Information Trends, Drivers, Barriers, and Social Implications. (Referred to hereafter as GTR 2020. See EFMN Foresight Brief No. 90). This report presents a comprehensive foresight analysis that identifies technology applications (TAs) most plausible by 2020, those countries capable of acquiring them and their likely effects on society.

Having reviewed GTR 2020, TBNA and TEDA managers approached RAND to conduct a foresight study designed specifically for their purposes. They commissioned RAND to do the following:

  • Identify promising emerging TAs for TEDA and other high-tech centres in TBNA to implement as a pivotal part of TBNA’s overall strategic plan for economic growth.
  • Identify the capacity needs to implement these TAs as well as the critical drivers and barriers that might facilitate or hinder implementation.
  • Develop a strategy and action plan for each TA.
  • Provide guidance on how these TAs might fit into an overarching strategic plan for TBNA’s economic development.

Incorporating Local Context and Current Realities

The analysis leading to the selection of TAs and, eventually, the strategies and action plans for them took into account four principal factors:

  • TBNA and TEDA’s missions as mandated by China’s State Council,
  • China’s pressing national needs,
  • drivers and barriers to technological innovation in China as a whole and for TBNA more specifically and
  • relevant capacity currently available to TBNA and TEDA both locally and more broadly in R&D, manufacturing and S&T commercialization.

The starting point was the 12 TAs identified in GTR 2020 as those that China could acquire by 2020. This was combined with a rigorous study of the realities, circumstances and issues in TBNA and in China more broadly, drawing on a diverse array of Chinese- and English-language sources:

  • Chinese- and English-language documents describing the mission, history and current status of TBNA and TEDA,
  • Chinese- and English-language literature on China’s social, environmental and economic needs, and measures that the Chinese government has taken to date to address them,
  • on-site interviews in TBNA, TEDA, the Tianjin Port, the municipality of Tianjin more broadly and the city of Beijing,
  • visits to S&T institutions that could provide capacity outside TBNA and TEDA, such as Tsinghua University and the Chinese Academy of Sciences and
  • a two-day workshop in TEDA with key figures from TEDA scientific institutions, firms and management.

Emerging Technology Opportunities for TBNA and TEDA

Based on analysis of the above sources, the authors narrowed the 12 TAs identified in GTR 2020 down to a final selection of seven. These either come directly from GTR 2020 or are hybrids combining one or more of the original 12.

  1. Cheap solar energy: Solar-energy systems inexpensive enough to be widely available to developing and undeveloped countries as well as disadvantaged populations.
  2. Advanced mobile communications and radio-frequency identification (RFID): Multifunctional platforms for sensing, processing, storing and communicating multiple types of data. RFID involves technologies that can store and wirelessly transmit information over short distances.
  3. Rapid bioassays: Tests to quickly detect the presence or absence of specific biological substances with simultaneous multiple tests possible.
  4. Membranes, fabrics and catalysts for water purification: Novel materials to desalinate, disinfect, decontaminate and help ensure the quality of water with high reliability.
  5. Molecular-scale drug design, development and delivery: The abilities to design, develop and deliver drug therapies at the nanoscale to attack specific tumours or pathogens without harming healthy tissues and cells and to enhance diagnostics.
  6. Electric and hybrid vehicles: Automobiles available to the mass market with power systems that combine internal combustion and other power sources.
  7. Green manufacturing: The development and use of manufacturing processes that minimize waste and environmental pollution and optimize the use and reuse of resources.

Drivers and Barriers to Implementation

Widespread, sustainable implementation of any TA depends on the balance between the drivers that facilitate implementation and the barriers that hinder it. The factors considered that will most influence China’s ability to successfully pursue cutting-edge R&D and technology innovation were:

  • the country’s needs,
  • its national R&D policies,
  • other national policies that could generate demand (or, as appropriate, reduce demand) for certain TAs,
  • intellectual property rights (IPR) protection,
  • finance and banking laws and regulations,
  • local policies, laws and regulations that could directly affect the ability of individuals and organizations to conduct cutting-edge R&D and commercialize innovative technologies,
  • human capital and
  • culture of R&D and innovation.

These same eight factors will most affect TBNA’s ability to develop and implement the selected TAs. Some of these are clearly either a driver or a barrier throughout most of China. But occasionally, local circumstances make them stronger or weaker drivers or barriers in a particular organization or region (or for a specific TA) than they are elsewhere in the country.

Several of these factors are unmistakable barriers in TBNA and hold for all seven TAs. IPR protection, for example, remains a barrier in TBNA, as in China as a whole, to both homegrown innovation and the involvement of foreign capital and talent in new R&D and technology ventures. Finance and banking laws and regulations are also a barrier in TBNA, as they are in China generally, because they discourage investment of venture capital. But, for certain of the seven TAs, sources of venture capital available to TBNA for specific technologies mitigate this barrier to some degree. Lack of a culture of R&D and innovation is a third barrier in TBNA, as it is in China as a whole. It discourages the risk-taking in new ventures that is essential to pursuing and commercializing groundbreaking R&D.

TBNA has one driver that all seven TAs share: human capital. This stems from the strength of TBNA’s current manufacturing base, the corresponding workforce and the concentration of academic institutions in the municipality of Tianjin. However, young Chinese people are tending to shy away from technical and vocational training, and domestic competition for S&E talent is heated. Both of these could be mitigating factors.

Capacity Currently Available to TBNA and TEDA

To fulfil the State Council’s mandate, TBNA and TEDA will need capacity in three areas: (1) R&D, (2) manufacturing and (3) S&T commercialization. Both local capacity—in TBNA, TEDA, and the municipality of Tianjin more broadly—and that from elsewhere in China and internationally will play a part.

In terms of R&D capacity, TBNA and TEDA have a growing number of institutions that provide cutting-edge research facilities and a professional cadre of highly trained scientists and engineers. But they face intense competition, both within China and abroad, for human capital of this calibre.

With regard to manufacturing capacity, TBNA and TEDA have a substantial industrial base that has been growing for the nearly 25 years since TEDA’s inception. Investment by an array of Fortune 500 companies, a track record of increasing industrial output and a rising gross domestic product (GDP) indicate the strength of this base. TBNA is also steadily improving the physical infrastructure—utilities, cargo facilities and waste-management processes—that are vital to manufacturing capacity. But a potential shortage of the skilled labourers and technicians needed to work in manufacturing and, again, heightened competition for those on the job market are real challenges.

As for S&T commercialization, TBNA and TEDA operate a well-established network of research parks and technology incubators aimed at supporting emerging high-tech enterprises. Ample financial incentives help spur development and attract human capital. Yet, these enterprises face considerable challenges due to China’s need to better protect IPR and reform finance and banking laws and policies. They also lack strong linkages between R&D institutions and commercial industry to facilitate the transfer of high-tech products to the market.

Strategy for Building TBNA’s Future

Implementation Strategies for the Selected TAs

China already has a well-developed first-generation solar-electricity industry. Consequently, the best opportunity for TBNA and TEDA in cheap solar energy lies not in entering the first-generation market but rather in becoming an R&D and manufacturing centre for second- and third-generation systems, initially for the global export market.

TBNA should aim to become an R&D and manufacturing centre for mobile communication devices and RFID systems. It should focus initially on the domestic Chinese market and then broaden to the global market. In addition, it should build state-of-the-art R&D programs in two component technologies: displays and power sources.

The long-term strategy is for TBNA to become a leading player in the global marketplace for state-of-the-art rapid bioassays. But its initial focus should be on using licensing and partnership agreements to attract leading companies to TBNA and TEDA.

Long-term goals for TBNA are: (1) to become a centre for R&D in nanoscale membranes, filters and catalysts and (2) to become a leader in manufacturing state-of-the-art membranes for purifying water. It is vital for TBNA to foster close relationships between research labs and private companies to facilitate commercialization.

TBNA should aim to become a centre for R&D and manufacturing of drugs developed through bio-nanotechnology. It should focus initially on attracting investment from foreign enterprises and, in tandem, on aggressively building homegrown R&D capacity. Eventually, it should direct R&D activities toward commercializing novel medical treatments and techniques.

Given the strong market potential of electric- and hybrid-vehicle components, TBNA should develop and expand collaborative R&D on subsystems and component technologies. At the same time, it should develop the capacity to manufacture hybrid vehicles and components for hybrid and electric vehicles. It should target the growing global market first and the Chinese market later.

TEDA should become a centre for green manufacturing in China. The initial focus should be on attracting to TBNA those companies at the leading edge of green chemistry and engineering. Over time, TBNA itself should start conducting R&D on new green manufacturing processes and, eventually, implement them in TBNA and TEDA.

An Overarching Strategic Plan

The seven TAs should form a pivotal part of TBNA’s strategic plan for economic growth through technological innovation. All of the TAs are in line with promising global trends; they are well suited to current capacities in TBNA, TEDA and the municipality of Tianjin and build on existing pillar industries; and they support Chinese government priorities.

Part of the overarching strategic plan should be geared toward addressing broad general challenges that currently stand as barriers to all seven TAs. The plan should include measures to help TBNA and TEDA enforce existing laws in the IPR domain. TBNA and TEDA should incorporate into the plan ample opportunities for cross-fertilization between research facilities and industry. Finally, it is vital that TBNA build a culture of R&D and innovation. The plan should contain elements that promote flexibility and risk-taking in TBNA and TEDA’s funded ventures. TBNA could use a three-pronged framework to integrate the specific action plans for the seven TAs into an umbrella strategic plan:

  • Develop state-of-the-art R&D capacity in relevant areas.
  • Update and expand the existing manufacturing base.
  • Build capacity for S&T commercialization.

These three activities would need to be carried out in parallel. Each requires using and expanding existing local capacity and introducing new capacity. Novel advances should stem from and extend the existing capacity base while fresh R&D programs are started and new companies with state-of-the-art capabilities come in to bring overall capacity up to world-class standards. Each will also support the others.

Authors: Richard Silberglitt            

Anny Wong                   

            Sponsors: Tianjin Binhai New Area (TBNA), Tianjin, China

Tianjin Economic-Technological Development Area (TEDA), Tianjin, China

Type: Technology foresight within the local and regional context
Organizer: RAND, Richard Silberglitt
Duration: 2007-2008 Budget: N.A. Time Horizon: 2020 Date of Brief: Dec 2009


Download EFP Brief No. 165_Global Technology Revolution China

Sources and References

The Global Technology Revolution China, Executive Summary: Emerging Technology Opportunities for the Tianjin Binhai New Area (TBNA) and the Tianjin Economic-Technological Development Area (TEDA), MG-776-TBNA/TEDA, RAND Corporation (2009).

The Global Technology Revolution China, In-Depth Analyses: Emerging Technology Opportunities for the Tianjin Binhai New Area (TBNA) and the Tianjin Economic-Technological Development Area (TEDA) (Chinese Language Version), TR-649/1-TBNA/TEDA, RAND Corporation (2009). Available online at